Shares of the world’s largest private-sector coal company, Peabody Energy, are trading at about $4 apiece. That leaves a lot of investors with millions in losses. Coal has been displaced by the natural gas boom and climate change concerns also play a role, energy correspondent David Gelles pointed out in a recent piece in the New York Times.

Peabody Energy is an old company that has long been criticized. An old bluegrass tune called “Paradise” references strip mining by declaring about a Western Kentucky town, “Mr. Peabody’s coal train has hauled it away.” But today’s criticisms have more to do with the company’s failure to disclose climate change risks.

Back in November, Peabody agreed in a settlement to disclose more about climate risk in its filings to the Securities and Exchange Commission (SEC). This came after the New York state attorney general conducted a two-year investigation. The company agreed to center its financial disclosures around two main areas: an emphasis on the published scenarios in the International Energy Agency's (IEA) World Energy Outlook report, and the ability of the company to estimate the impacts from future laws or regulations.

Peabody is not the only fossil fuel company to fail to disclose climate change risks. ExxonMobil, the largest oil and gas company in the U.S., is being investigated by both California and New York for not disclosing climate risks to investors and the public.

So, what does it say about the SEC? Consider that in 2010 the SEC issued interpretive guidance on climate risk disclosure. The interpretative guidance highlighted certain areas as examples of where climate change may trigger disclosure requirements, which include the impact of legislation and regulation, the impact of international accords, and physical impacts of climate change.

"We are not opining on whether the world's climate is changing, at what pace it might be changing, or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics," SEC Chairman Mary Schapiro said in 2010. "Today's guidance will help to ensure that our disclosure rules are consistently applied."

Unfortunately, Schapiro’s words proved to be hollow, as a letter sent last spring by 62 institutional investors representing over $1.9 trillion in assets to the SEC proves. “We are concerned that oil and gas companies are not disclosing sufficient information about several converging factors that, together, will profoundly affect the economics of the industry,” the investors wrote. They “believe it is crucial that SEC staff closely scrutinize oil and gas companies’ reporting on carbon asset risks under existing SEC rules,” and specifically asked for the SEC to “scrutinize disclosures in annual filings” by oil and gas companies regarding “carbon asset risks.”

The New York state comptroller also sent a letter to the SEC last spring asking for it to “act to improve corporate disclosure of material risks in the fossil fuel industry.” The letter stated that “at a minimum” companies in the fossil fuel industry should disclose their analysis of three key areas:

Risks to fossil fuel reserves associated with greenhouse gas emission reduction policies that may be adopted by national, state and local governments.

Risks to company assets associated with physical risks of climate change including sea level rise and extreme weather.

Risks and opportunities stemming from changes in the market associated with climate change mitigation policies and initiatives.

“We are concerned about the level of scrutiny the SEC is utilizing to robustly and effectively enforce this guidance,” congressional members stated in a letter sent to the SEC in October. The letter asked the SEC for an update on its efforts to implement its 2010 interpretative guidance on climate risks disclosures.

The SEC is reviewing its requirements for what companies must disclose, the New York Times reported, and new rules may be introduced this year. Given the laxity the SEC has shown regarding climate change risks disclosures in the past, it is time for the commission to enforce its requirements. Investors have the right to know about operational risks.

Gina-Marie is a freelance writer and journalist armed with a degree in journalism, and a passion for social justice, including the environment and sustainability. She writes for various websites, and has made the 75+ Environmentalists to Follow list by Mashable.com.